ELECTRIC SUPPLY

Otago Daily Times, Issue 23351, 17 November 1937, Page 8

ELECTRIC SUPPLY

INCREASED CONSUMPTION PROFIT ON YEAR'S OPERATIONS FINANCIAL POSITION OUTLINED A successful year financially was reported by the Minister of Public Works (Mr R. Sample) in dealing with hydroelectric development in his annual Statement, which was tabled in the House of Representatives yesterday The whole electric supply account, he said, had been able to earn 6.78 per cent, on the operating capital after paying net operating expenses. For the year just closed the number of units generated in the Government stations showed an increase over the previous year of 10.62 per cent, in the North Island and 11.56 per cent, in the South Island. The position of the Electric Supply Account is summarised in the following table: —

Loss in South Island In the North Island the depreciation reserve required by the State Supply of Electrical Energy Act—viz., per cent, of the capital invested—has already been reached, and a considerably reduced amount is therefore chargeable to depreciation, with a consequential credit balance of £244,140 on the year's operations. This balance has been used to reduce the amount of deficiency which has been accumulated in earlier years and which now stands at £155,175. In the South Island, where in the past the depreciation reserve had reached the 12i per cent, limit mentioned above, the addition of a large amount of additional capital has necessitated the resumption of full payments into the depreciation reserve fund, with the result that the year's operations show a loss of £108,106. This deficiency is greater than that shown for last year, and is accounted for by an operating loss of £19,496 on the recently-acquired Southland electric supply system, on which the full depreciation charge of 2 per cent, has been paid, and by a non-recurrent payment of £26,420 as the cost of raising loans during the year.- To meet this loss the general reserve has been drawn on, and has consequently been reduced to £67.703.

The general position to date is that the Electric Supply Account has been able to meet all operating and interest charges, has provided £1,265,796 towards the statutory requirements of £1,420,971 for depreciation, and, in addition, has provided £327,044 to sinking fund and £67.703 to general reserve from profits made from time to time on the Lake Coleridge system. In other words, the Electric Supply system as a whole has paid Interest and operating charges and provided £1,660,543 in reserves, of which £313,614 has already been utilised by the Treasury for the paying-off of loans which formed part of the original capital. The capital invested in the electric supply systems operating throughout the Dominion totals £34,253,508, which includes £15,125,420 of Government expenditure, and the gross revenue received for the year was £5.124,220. After paying working costs, interest, sinking fund, and depreciation charges, the net profit for the year under review was £570,131, as compared with £554,154 for 1936, which indicates that the electric-supply business as a whole is in a healthy condition. An analysis and summary of the operating results and other statistics furnished by each electric-supply authority reveals the fact that there has been an increased consumption of electrical energy amounting in the aggregate to approximately 10.6 per cent, over that of 1936. This is due mainly to intensive load-building campaigns on the part of many of the retail supply authorities. The statistics also indicate that during the past year 15,054 new consumers have been connected at an average rate of approximately 1250 per month, and the completed figures for the year show that the ratio of number of consumers of electricity to the total population of the Dominion (1,577,109) is 23.5 per cent., or 25.4 per cent, of pomilation in areas supplied with electricity. Otago-Southland Area

An important event in the electrical section was the purchase of the whole of the generating works and reticulation of the Southland Electric Power Board. The works were taken over early in October. Until such time as this system can be connected to the general Government system by means of a transmission line between Dunedin and Gore, it has not been possible to do a great deal to stimulate the business in the area, as it would not be possible to supply any great increase in power demand. There is, however, already an indication that there will be a considerable increase as soon as extra power is available, and the whole organisation and basis of charges is being reviewed with a view to generally increasing and improving the supply in the area.

MS 6 a North Island system South Island system .. Totals 887,410 329.058 o a !> oi 144,315 85,829 743,095 243,229 1,216.468 230.144 986.324